Gold Mine of an Opportunity, Slag Pit of a Reality…

What, oh, what could I be referring to?  How about the iPhone?  Yeah, I’m going to go there….Okay, AT&T has got exclusive rights to the iPhone right now.  On the one hand, this would seem like a brilliant idea, right?  Everybody lines up for the “hot new item”, the people who can switch to AT&T, meanwhile Apple Computer makes a killing by selling the device, right, right?  Nope.  The real winners?  The techie geeks.  Once the iPhone hit stores, everybody was diving over each other, trampling small children on the sidewalk, and shortening the lives of employees everywhere… so they could mutilate their new toys.  Now, some people did actually buy the iPhone for the sake of being a loyal AT&T customer (including several tourists from other countries that don’t actually have AT&T)… but there were a lot of people who looked at the slender object and saw dollar signs all over it.  Basically, they bought the iPhone, took it apart to see who made the parts, and hit the stock markets.  Skyworks, Apple, TI, and AT&T stocks got some rather nices boosts to their prices at the market in the ensuing fray, and just like that… it was over.  The geniuses who bought the said stocks resold them after their purchases had the desired impact on the price, and people started looking to sell to get some of their money back.  The problem is the one slow guy who is a new techie, probably got it in the shorts because his dialup connection had too long of a lag time to sell in the frenzy.

After this, you might wonder what the golden opportunity is.  Well, after all is said and done, you got people like this genius in New Jersey (http://www.foxnews.com/story/0,2933,294901,00.html) who bought an iPhone, and somehow found a way to get it unglued from AT&T’s network.  So, this 17 year old kid, after spending 500 hours of his life, an amazing amount of money on a high tech device, taking it apart, putting it back together in a usable form, he promptly………….. trades it for a car and three more high tech devices that he just took apart…  Now, an iPhone hacked using a different technique (messing with the software rather than the hardware) was recently put up for auction on Ebay.  It sold for more than $15,000.  I’m no mathmetician, but that’s a heck of a profit (or a major profit for you Bible scholars… I make pun) for a one time sale.  It’s almost enough to make me think I’m in the wrong business.  In selling one a month, making half as much on the sale price, this brother could be making $90,000 in one year… not enough to retire on, but that’s a rather pretty supplemental income if you were asking my opinion (which you obviously are because you have read this far).

 Now, the fun bit.  The real losers?  AT&T.  They made this huge deal that should have been a marketing coup, by getting a solo contract with the biggest cell phone release since the Razr.  What does that solo deal mean?  $$ out the wazoo (insert cash register noise here).  Now, all those guys who hacked the phone?  Either they already had existing contracts with AT&T, or they canceled the contract the second they got home.  The guys who canceled just absorbed the minor loss in cash, with the promise of a motherlode down the lane.  So what about all those hacked iPhones?  They get resold to people who might not have AT&T service, but aren’t paying AT&T for the phone anyway.  When it’s all said and done?  Apple gets off with a handsome payoff in selling the phones to AT&T, AT&T loses their shirts in selling iPhones only to have the contracts canceled, and the techies that hack the iPhone make a wad of cash in reselling them here and abroad.  AT&T might not have shot themselves totally in the foot by getting the exclusive, but they at least grazed their achilies tendon.  Once the iPhone is released to the rest of the cellphone world, the hackers will go away and the only people buying iPhones… will be the people who want to use one.

Peace out,

Adam

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~ by xristosdomini on August 29, 2007.

3 Responses to “Gold Mine of an Opportunity, Slag Pit of a Reality…”

  1. I’m going to take a wild guess that AT&T isn’t crying yet, but I agree with you that they can’t be happy about the phones being unlocked. I’m going to take another wild guess and say they’re probably already on the horn to Steve Jobs about “minor engineering changes…”

  2. Lol, it would have to be some major engineering changes, it sounds like. How would you like to be in on that call? “Hello, people are hacking your product and it’s costing us money…”

    I guess the real drive here is that AT&T, like other contract sells (like WalMart or Target selling Xboxes) aren’t making any kind of real money on selling the phone. The real money to be made by AT&T selling these things is in the massive amount of two year contracts that get tagged along with them. With all the people taking their phones apart, hacking them, or just investing in the partmakers, you know they aren’t going to keep that contract. Otherwise they end up paying for a phone contract they aren’t using. I’m sure AT&T isn’t crying, but I bet there is a little bit of whimpering at the less-than-impressive final figures. Steve Jobs and the hackers are the people making out like bandits, IMO.

  3. I saw a headline today that the hackers are beginning to hold up a little, because of a threat of legal action. Like, DUH dude!

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